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Thursday, October 13, 2016

The Economics of Sea Level Rise

The seas are rising and along with massive displacement, there will be massive costs. A 2015 study showed that sea-level rise is accelerating at a rate of about 12 percent a year. Christopher S. Watson, a climate scientist at the University of Tasmania in Australia and co-author of research published in the journal Nature. This research suggests that we will see more deaths and injuries from storm surges and flooding as well as radically increasing rates of property damage over the next several decades.

"In Australia, there’s about $226 billion worth of infrastructure in the way of that sea-level rise, and that’s before you take into account the ecosystems," Watson is quoted as saying in a Takepart article. Looking to the northern hemisphere, "Hurricane Sandy is a good example [that] the previously once-in-a-lifetime floods are going to become a lot more frequent."
Hundreds were killed by Hurricane Sandy and there was almost $1 trillion in direct damages. The New York metropolitan area saw more than $68 billion in damages. Scientists predict that Sandy-like events will increase by 400 percent in the coming decades.

Rising sea levels are not only a source of concern for climate scientists they are also a concern for economists. A Freddie Mac economist recently warned of a looming housing crisis caused by sea level rise. As reported by Jess Swanson, by 2045 people are expected to be forced from their homes in parts of South Florida. Sean Becketti, Chief Economist at Freddie Mac said that these people will abandon their homes causing lenders, servicers, and mortgage insurers to suffer massive losses.

These losses are but the tip of the proverbial iceberg. In a Washington Post article, Brady Dennis reviews research which shows that nearly 1.9 million U.S. homes could be underwater by 2100. These are the findings from research by the real estate data firm Zillow. This will not only displace millions of people it will result in property losses in the hundreds of billions of dollars.

According to the research, six feet of sea level rise will inundate nearly 2 percent of all U.S. housing stock translating to $882 billion worth of homes.

"More than 100,000 of those homes would be in Maryland and Virginia, according to the analysis. Another 140,000 would be submerged in the Carolinas. And Florida would face the gravest scenario of any state, with one in eight properties in danger of being underwater."

In Boston, 20 percent of homes are expected to be submerged and in Honolulu, sea level rise will impact 25 percent of homes. In other places like Miami, it could be far worse.

According to the think-tank Global Climate Forum, the cost of sea level related disasters could rise from an average of $25 billion per year to $100 trillion per year by 2100.